CENTER FOR INTERNATIONAL ECONOMICS

Working Paper Series

Working Paper No. 2017-11

The German Precariat and the Role of Fundamental Security

Is the Unconditional Basic Income a Possible Solution for the Growing Precarity in Germany?

Bernard Michael Gilroy and Julia Günthner

November 2017

1

The German Precariat and the Role of Fundamental Security

Is the Unconditional Basic Income a Possible Solution for the Growing Precarity

in Germany?

Working Paper

Prof. Dr. Bernard Michael Gilroy, Julia Günthner

Abstract

The international business competition fostered new forms of flexible working and atypical

employment. The flexibilization process started during the 1970s and continues to change the

labor market and the perception of labor to the present day. As a result, a new class, called the

precariat, is establishing which can be characterized by insecure employment and living.

Precarity resulting from fixed-term, short-term, part-time or temporary employment can

concern everyone and has negative consequences on society, economy and health. In parallel

to the development of precarity, a possibility of basic security in the form of the Unconditional

Basic Income (UBI) is discussed globally. However, the particular situation in Germany,

regarding the precariat and the UBI as a possible solution has not been outlined yet. Although,

UBI implementation models have been proposed for Germany, there is no analysis in the

current literature that would show the effect of the UBI on the German precariat. Applying a

modern macroeconomic analysis within the scope of the jobless growth argument, the paper

investigates the effect of an UBI on goods demand, economic growth, employment level and

consequently, the precariat. The paper shows that an implemented UBI as well as labor-related

security increase economic growth and can reduce the German precariat. Politicians and

employers should be aware of this positive aspect of the UBI and implement policies to reduce

labor-related insecurities in order to decrease the growing precarity.

Keywords: Precariat, atypical employment, flexibility, basic income, jobless growth, AS, AD

JEL-Codes: E21, E24, E27, H53, I13, J68

2

1. Introduction

“One theme was that countries should increase labor market flexibility, which came to

mean an agenda for transferring risks and insecurity onto workers and their families.

The result has been the creation of a global ‘precariat’, consisting of many millions

around the world without an anchor of stability. They are becoming a new dangerous

class” (Standing, 2014, p.1).

Precarious working and living exists in every country, regardless of whether this particular

nation is rich or poor. The situation includes Nepalese workers whose houses were destroyed

by an earthquake and who go to Qatar to build new soccer stadiums for the FIFA World Cup

to earn money for the family. The workers often receive less income than they were promised

and some die due to bad working conditions (ARD Mediathek, 2016). Many Chinese workers

experience a similar situation, being brought into industrial working camps far from home,

where many commit suicide (Standing, 2014, p.48). In developed countries, the academic

precariat consists of unemployed graduates and researchers doing project based work with

fixed-term contracts in universities (Dörre, 2009, p.50). Geographical precarity is another

phenomenon that often results from insecure employment. It describes precarious living, such

as the suburbs in Paris (Castel, 2009, p.32). The actual quantity of the precariat cannot be

determined precisely as there are no specific statistics. Moreover, there are certain groups in

the precariat, which cannot be assessed due to unknown dark figures (Standing, 2014, p.108).

It is only possible to estimate the number of people who seem to have insecure employment or

who are denied the rights regular citizens usually have (ibid. p.24). The resulting number is

approximately one quarter of the overall adult population that could be described as members

of the precariat (ibid. p.41). 1

Precarious situations include facing the risk of poverty and social exclusion2 (Schmid and

Protsch, 2009, p.29). Poor individuals often cannot have a well-structured life plan due to the

lack of saving possibilities. As the statistics presented in 2011 by the European Commission

show, approximately one out of four of the EU citizens is at risk of poverty or can become

socially excluded (European Commission, n.d.). Having a job neither prevents from social

exclusion nor from poverty. About one-tenth of the employed EU population faces this risk

(ibid.) due to the fact that the number of atypical employments increased in all European

countries (Schmid and Protsch, 2009, p.24). Regarding Germany, its labor market has changed

1 The authors express their thanks for helpful comments from Sarah Kröger. 2 This is measured by the AROPE (a risk of poverty or social exclusion) indicator. It describes a “...situation of

people either at risk of poverty, or severely materially deprived or living in a household with a very low work

intensity” (Eurostat, 2014).

3

since 1985 (ibid. p.3) with atypical employment in every sector (ibid. p.16). Although the

unemployment rate decreased from 11.7 percent in 2005 to 6.1 percent in 2016 (Bundesagentur

für Arbeit, 2017, Table 2.1.1), the percentage of the German population at risk of poverty

increased from 15.2 percent in 2008 (Statistisches Bundesamt, 2011, p.25) to 16.7 percent in

2015 (Statistisches Bundesamt, 2017, p.23). About one third of single households has a

precarious material status, while women have a higher risk than men regarding financial

insecurity (ibid.). Furthermore, one out of five Germans is concerned by the risk of social

exclusion and people in the employable age are at the highest risk of 21.3 percent (ibid.). Along

the lines of argumentation presented here, a new study by Brady and Biegert (2017) also

documents a rise in precarious employment in Germany. Their analysis of the disappearing

“German miracle” (Burda 2016) reveals that models including a wide variety of independent

variables – demographic, education/skill, job/work characteristics, and region – cannot explain

the rise in precarious employment. Instead they argue that institutional changes to be the most

plausible fundamental reason.

Precarious employment brings new social risks and it is crucial to find ways of reducing them

by a new form of social protection (Schmid and Protsch, 2009, p.14). The Unconditional Basic

Income (UBI) is regarded as a possibility to reduce poverty, improve health as well as social

and political involvement (Basic Income Earth Network (BIEN), n.d.a). Global discussions

about implementations of an UBI also influence the debates in Germany, such as

implementation models proposed by Poreski and Emmler (2006), Die Linke,

Bundesarbeitsgemeinschaft Grundeinkommen (2006), Werner (2007), Althaus (2007) as well

as Hohenleitner and Straubhaar (2008).3

2. What is the precariat?

2.1 Defining precarity

The precariat is a class-in-the-making rather than a class-for-itself (Standing, 2014, p.11). Two

familiar terms form the word precariat, namely the adjective precarious and the noun

proletariat, making the precariat a neologism (ibid.). However, unlike the proletariat, the

precariat does not have a prospect of a long and stable employment supported by collective

bargaining (ibid. p.10), as well as no particular identity resting upon a specific occupational

community (ibid. p.16). According to the Macmillan Dictionary (2011), the precariat describes

“a social group consisting of people whose lives are difficult because they have little or no job

3 A brief literature review can be found in Gilroy, Heimann and Schopf (2013).

4

security and few employment rights”. Standing (ibid. pp.16-17) emphasizes that the precariat

does not have the seven aspects of labor security which are defined in Table 1 below:

Table 1: Forms of labor-related security

Labor-related security Definition

Labor market security Adequate income-earning opportunities; at the macro-level, this is

epitomized by a government commitment to “full employment”

Employment security Protection against arbitrary dismissal, regulations on hiring and firing,

imposition of costs on employers for failing to adhere to rules and so on

Job security Ability and opportunity to retain a niche in employment, plus barriers to

skill dilution, and opportunities for “upward” mobility in terms of status

and income

Work security Protection against accidents and illness at work, through, for example,

safety and health regulations, limits on working time, unsociable hours,

night work for women, as well as compensation for mishaps

Skill reproduction security Opportunity to gain skills, through apprenticeships, employment training

and so on, as well as opportunity to make use of competencies

Income security Assurance of an adequate stable income, protected through, for example,

minimum wage machinery, wage indexation, comprehensive social

security, progressive taxation to reduce inequality and to supplement low

incomes

Representation security Possessing a collective voice in the labor market, through, for example,

independent trade unions, with a right to strike

Source: Standing, 2014, p.17

As far as income security is concerned, Standing (ibid. pp.18-20) states that the concept of

social income further explains the situation of the precariat. The idea of social income is built

on the assumption that there are generally six different sources of income, which are self-

production, money income, mutual support claims by family or community, company benefits,

state benefits and private benefits resulting from saving and investment. The precariat has a

particular social income pattern. People in the precariat cannot rely on family or community

support, on state or firm benefits and cannot earn additional money income due to the lack of

private benefits (ibid.). Furthermore, people in the precariat can be described as denizens or

individuals who are not granted the same rights as people enjoying full citizenship. These can

be civil, cultural, social, economic and political rights (ibid. pp.22-23).4

Bourdieu (2004, p.107) states that “precarity is everywhere” and that it has only one main

effect: de-structuring of the human subsistence and a lost connection to space and time. In order

4 For an example of the “Business Ethics: Profits, Utilities, and Moral Rights” see e.g. Goldman (1980).

5

to be able to act in a reasonable way in the present, people need to hope for a better future which

is not the case with the precariat. Standing (2014, p.20) calls it no shadow of the future, leading

to opportunistic patterns of behavior. Precarity reminds workers of their substitutability,

whereas employment is only a fragile privilege (Bourdieu, 2004, pp.107-108). However,

although many perceive atypical employment as negative, it is possible that it represents a new

form of standard employment which could be a win-win-situation for workers and employers

in the global labor market (Schmid and Protsch, 2009, p.1). Precarious employment enables a

high employment level, especially as far as women are concerned (ibid. p.14). Precarious

employment can further be regarded as liberation from traditional professional relationships

(Castel, 2009, p.26). Especially highly qualified individuals often distance themselves from the

negative image of the precariat and identify themselves as free self-managers (Dörre, 2009,

pp.47-49).

Time and its perception has mainly changed since the beginning of the industrialization and

this change is an important part of the precariatization (Standing, 2014, p.197). Before the

industrialization, working time was associated with seasons and weather conditions rather than

with regulated labor hours (ibid.). Also, modern lives do not comprise time blocs anymore.

People do not have a structured education, labor and retirement period and the lines between

workplace and home are blurring (ibid. pp.199-200). A crucial aspect of flexibility is time that

is needed to do work-for-labor, meaning that there are many activities, such as searching for

job offers, buying clothing for interviews, improving the CV, acquiring additional skills etc.

that should be done in order to perform well in labor (ibid, pp.206-209). A rather long-term cost

of such time squeeze is the reduction of time devoted to raising children and transferring ethical

behavior (ibid. p.215). This may enlarge the future precariat.

2.2 Who is in the precariat?

According to Standing (2014, p.101), everybody can be in the precariat due to some unforeseen

circumstances. However, there are particular groups that generally have a high likelihood to be

precariatized. According to Standing (ibid. p.112), the youth is the most prevailing group in the

precariat due to frequent labor exploitation. Examples are the use of internships to employ

cheap or costless workforce as well as long probationary time periods during which young

employees receive less salary and less firm benefits. Simultaneously, there is a general feeling

among young people that they should do as many internships as they can (ibid. pp.128-129). In

particular, the young male population experiences difficulties finding an identity with which

6

they would have self-respect. This is mainly because there are no traditional role models among

the male relatives who would show by example how to achieve stability in employment, a well-

planned life and how to be able to provide for the family. Consequently, the male youth extends

its adolescence period (ibid., p.109), a phenomenon that is present in many industrialized

countries where “the image is of the ‘boomerang son’, returning home after education and

drifting into lethargy, part-time jobs, debt, drugs and vague ambitions ‘to travel’” (ibid., p.110).

Moreover, a study of the Friedrich Ebert Stiftung (2006) estimated that some eight percent of

the German population now belongs to the abgehängtes Prekariat (detached precariat) and is

largely composed of eastern German male low-wage workers with a tendency to sympathize

either with the political left wing party (Die Linke) or the extreme right wing political parties

(AfD).

Another important population group which is particularly represented in the precariat is the

population of women. Currently, there is a phenomenon of double feminization of labor which

means that the number of women in the labor market increases, while simultaneously, the labor

market becomes flexible which seems to be especially an advantage for women (Standing,

2014, p.102). Precarious employment particularly fosters the triple burden, meaning that beside

the job which is the money income source, women work at home raising children and often

care for elderly family members (ibid. p.105). Older people also form a very important part of

the precariat, mainly due to demographic changes (ibid. p.135). While in the 1980s, elderly

people had to retire untimely, the retirement age is now constantly extended due to the lack of

young professionals (ibid.). Another reason why the precariat comprises a group of elderly

people is the decrease in state pensions in most industrialized countries (ibid. p.136).

As migrants are an important group in the precariat, it is crucial to understand their situation

(Standing, 2014, p.153). Undocumented migrants can be employed in bad working conditions

and for very low wages as they can be controlled by the fear of being deported (ibid.). As there

is a high risk of a thriving shadow economy, Standing (ibid.) calls undocumented migrants the

shadow reserve army. Migrants also have problems finding appropriate jobs because their

qualifications and diplomas are often not recognized in the destination country (ibid. p.162).

In addition to the groups mentioned above, part of the global precariat are ethnic minorities,

such as the American black population, disabled and episodically disabled people, like those

who sometimes experience burnouts or depression, and criminalized people who face

7

difficulties to find regular employment after being released from prison and who are often used

as cheap labor for production during the incarceration (Standing, 2014, pp.147-151).

2.3 Reasons and consequences of precarity

The consequences of the neo-liberal politics in the 1980s are diverse measures of flexibility,

including wage, employment, job and skill flexibility. The objective has been to attract

investment and thus to ensure economic growth (Standing, 2014, pp.8-11). An important event

associated with the precariat is the global transformation (ibid. pp.45-52). It particularly implies

the increase in trade between nations and the relatively new importance of the emerging market

economies (ibid. p.46). Especially, the entering into the world trade market by China and India

has caused a high increase in global labor supply and a decrease in wages. Labor market

participants in industrialized countries have found themselves in worse bargaining positions

than before (ibid. pp.46-47). This has been followed up by the fact that union membership has

hit an all-time low in Germany since 2016 (see Figure 1 below).

Figure 1: Evolution of Gross Union Density

Source: Statistisches Bundesamt, n.d.

Part-time employment also contributes to the growth of the precariat because it is often open to

exploitation (Standing, 2014, p.60). Employees in part-time are often required to complete more

work hours than they are officially paid for (ibid.). Additionally, the worldwide growth in labor

agencies, acting as intermediaries, promote non-standard employment (ibid. p.56). Outsourcing

8

and offshoring allow shifting employees who consequently, cannot control their career path

(ibid. pp.62-63). Moreover, in times of de-industrialization and tertiarization of economies,

collective and union bargaining has strongly declined which has fostered individual precarious

contracts (ibid.). Another important event that increased the amount of people in the precariat

is the economic crisis. Especially, the financial crisis of 2008/2009 led to labor cost reductions,

so that many found themselves in precarious employment or even unemployment (Standing,

2014, pp.83-86).

Education plays a crucial role in the precariat and the current commodification of education, is

the main reason for the high number of young people in the precariat (Standing, 2014, p.115).

The main goal of the current education system is not to transfer valuable knowledge by inter-

generational communication, but rather to create employable human capital (ibid. p.115-118).

University education does not guarantee an appropriate position in the labor market as the

majority of new jobs that are created are not meant to be for university graduates (ibid. pp.115-

116). Hence, many young graduates have to accept positions that require low levels of

qualification and consequently, suffer from frustration. Traditionally, education has been the

core element of mental development and liberation (ibid.). In a globalized society, education

represents a competitive industry which can be observed by diverse rankings of universities

worldwide. Thus, instead of promoting universities on the basis of teaching quality, many

emphasize the importance of modern facilities instead (ibid. p.117).

Generally, people who find themselves in precarious employment situations tend to prolong

their bachelorship as well as start a family later than an individual with a stable position

(Standing, 2014, p.110). While the number of marriages decreases in industrialized countries,

cohabitation becomes the new family form (ibid. p.111). Furthermore, there is a trend towards

more single households (ibid.). This fact has many economic consequences. Especially,

regarding the expenditures of a household. A family with children demands more products in a

larger quantity and invests in property and vehicles. This leads to a higher GDP and to economic

growth of a nation. As opposed to this, single households would not invest or buy in large

quantities, which can decelerate a country’s production and growth. In the past 20 years in

Germany, the number of single- and single parent households has risen rapidly. Between 1991

and 2011 the share of single households increased from 33.6 percent to 40.4 percent. During

the same time period, the number of households in Germany with at least three members

decreased from 35.6 percent to 25.4 percent (Grabka and Frick, 2008; Statistisches Bundesamt,

2013). Many household and homemaking budget costs develop under proportionally respective

9

household size, meaning that their equivalent available income is smaller due to smaller

household size.

Precarious living results in the lack of trust in labor and limited community support (Standing,

2014, p.14/33). Members of the precariat thus feel anger, anxiety, anomie and alienation (ibid.

p.33). People become angry due to the status frustration, the lost ability of social upward

mobility and the permanent comparison with regular workers (ibid. pp.33-34). On a societal

level, precariatization can cause an involuntary change in roles within a family (ibid. pp.106-

107). While more women become the main earners in the family, men have lost a large share

of employment partly due to the recession and partly due to the above mentioned feminization

of labor.

As there are situations where parents and children have a precarious living, they cannot afford

to support each other financially. This leads to a loss of the inter-generational solidarity and

coherence which is an important component within a family (ibid. p.37/112). As a result, people

have to rely on costly loans that often increase their debts and make the living circumstances

even more precarious (ibid. pp.82-83). Moreover, as those in the precariat do not have a stable

employment with constant training possibilities, they cannot develop a professionalism that

would ensure a certain status and good career prospects (ibid. p.39). This might lead to

disengaged, unmotivated employment relationships and ultimately to bad results at work (ibid.

p.40).

3. What is Unconditional Basic Income (UBI)? 3.1 Definition

UBI is related to many names, such as citizen’s wage, territorial dividend, state bonus,

demogrant etc. (van Parijs, 2004, p.7). Standing (2014, p.295) describes the idea of UBI in the

following manner: “The core of the proposal is that every legal resident of a country or

community, children as well as adults, should be provided with a modest monthly payment”.

The international network, Basic Income Earth Network (BIEN), states that the UBI is “…a

periodic cash payment unconditionally delivered to all on an individual basis, without means-

test or work requirement” (BIEN, n.d.a). Standing (2014, p.296) further claims that additional

money should be paid to recipients with special needs, such as disabled individuals.

Furthermore, it should be the choice of each individual what to spend the UBI on. Thus,

vouchers on specific products or services should not be part of the UBI because such practice

would not foster free choice but rather support unfreedom (ibid. pp.296-297).

10

The general idea of a basic income is not new as already in the 16th century the minimum

income was promoted to help the poor population and to ensure dignity (BIEN, n.d.b). For

example, Utopia, written by Thomas More and first published in 1516, contains an argument

in favor of minimal income because it would help to reduce theft. Sentencing thieves to death

is described as inefficient due to bad living situations, particularly as far as food is concerned.

Thus, providing the poor with a minimal income would resolve this dilemma and prevent them

from becoming thieves (More, 1963, pp.43-44). In the end of the 18th century, the discussion

about UBI emerged again in the form of the idea of basic endowment (BIEN, n.d.b). Paine

(1999) states that in a natural state, land is regarded as common property so that every

individual, regardless of the family’s status, has some property after being born. In a civilized

society, such entitlement is invalid, as there are inhabitants who can cultivate a piece of land

and retain it as property over several generations. Therefore, in civilization, every affluent

person who has land property should pay a property rent tax to the society, so that even the

poorest individuals have some asset they can rely on and are not forced to live a life that is

worse than it would be in a primitive society. Paine (1999, pp.7-10) emphasizes that the

payment should not be regarded as charity but as a universal right to compensation.

3.2 Pros and Cons of an UBI

The approach of social security in the form of an UBI is criticized regarding various aspects.

Hauser (2007, pp.68-70) identifies six main issues that will affect a nation after the introduction

of an UBI. Firstly, the current social security system has to be abolished, implying a cancelling

of important social transfer payments. Secondly, he estimates there may still be a deficit of

approximately 287 billion euro for the studied time period, as a rough example for Germany.

As a third problem the author mentions the end of the force to participate in the labor market

as the subsistence minimum is provided by the UBI. There are particular groups that probably

will reduce their labor supply or completely exit from the labor market. In particular, this would

concern women with children, elderly people, graduates and the long-term unemployed

population. The fourth problem concerns a high probability of a massive immigration in the

country that implements an UBI, especially when there are regulations regarding a free

movement of people like in the EU. Consequently, this would lead to a more serious financial

burden. An inefficient redistribution is the fifth problem. People participating in the labor

market and earning labor income would have to finance the rest of the population through high

taxes, an opinion that van Donselaar (2009) agrees with. As a result, employees would

increasingly search for possibilities to hide income, such as choosing illegal informal labor

market practices. Lastly, there is no ultimate efficiency of the UBI approach as citizens would

11

have to finance the majority of the UBI transfer payment by themselves (Hauser, 2007, p.70).5

Wiesenthal (2007, pp.79-82) states that the idea of an UBI is a real utopia. According to him,

there is a fundamentally different problem, particularly in Germany, namely a lack of

motivation and a relatively bad educational system. Especially the young population should not

experience an opportunity of pausing but have incentives instead. They should learn how to

handle flexible job situations. An UBI would aggravate the issue of willingness and lead to

social exclusion. Furthermore, even if the UBI is financed through the goods tax instead of the

income tax, it has a negative, inflationary effect. Low-wage workers would be the ones whose

situation will be worsened by high prices on goods (ibid.).

There are many positive aspects of the UBI which are presented by the proponents (Netzwerk

Grundeinkommen, n.d.a). For example, employers could benefit from the UBI because their

employees would receive additional support by the state and this might not only increase

happiness and productivity in the company but also relieve the employer in his role. With the

implementation of the UBI, employees become more independent from gainful employment

and have the possibility to perform other activities outside the economic market, for instance

volunteer or do work within the family. Simultaneously, an UBI ensures a basic security which

prevents all individuals from working poverty. Job seekers can benefit from a calm search for

employment without having the pressure of taking jobs that do not correspond with their

education or professional skills. This advantage can therefore be interpreted as the possibility

of denying an unattractive job offer (ibid.). As opposed to the majority of current social security

systems, the introduction of an UBI creates a situation where citizens live on a subsistence level

only if they decide not to work (Hauser, 2007, p.67). Otherwise, a much higher standard of

living can be achieved. Additionally, the UBI has an overall positive impact on the society

because it diminishes discrimination and class division among citizens. Thus, there is a

possibility that stigmatization is reduced (Netzwerk Grundeinkommen, n.d.a). Finally,

regarding the effect on the state, a universal UBI facilitates the administration process of

transfer payments (Hohenleitner and Straubhaar, 2008, p.23) and does so before any social

issues arise (van Parijs, 2004, p.15). It is an approach that in many proposals requires only a

proof of existence, which can be submitted in the form of a birth certificate (Hauser, 2007,

5 According to Ehrenberg (1994, pp.6-13), cross-border economic integration and national political

sovereignty have come into conflict and as it can be simply analyzed in a supply and demand curve diagram

it is almost always the case that the burdens of social policies are carried on the shoulders of labor.

12

p.66). Therefore, the state can become more efficient.

Although there is negative critique regarding the effect of the UBI on labor supply and

employment, some authors present evidence that after the implementation of the UBI the labor

participation rate can even increase. Gilroy, Heimann and Schopf (2013, p.43) examine the

current German social security system and labor situation in a neoclassical labor supply model.

They find out that although there is no intrinsic motivation in a neoclassic model, the UBI

approach increases employment. One of the major advantages of the UBI, particularly

regarding Germany, is that it simultaneously represents a possibility to eliminate the

unemployment trap6 (ibid. 2013, p.58). Therefore, as recipients are punished with a lower

transfer payment and the cumulative income does not increase, labor activity becomes less

profitable (Schramm, 2008, p.182). Moreover, Gilroy et al. (2013, p.49-50) state that the

introduction of a basic income would increase the progressivity of the average financial burden

relatively to the gross wage and therefore, the UBI would support fair redistribution. Other

authors have similar results. Although the analysis done by Petersen (2011, pp.929-930) shows

that an UBI leads to a reduction of labor supply and in some cases, to a withdrawal from the

labor market, the analysis is based on the behavior of a rational agent, a Homo Oeconomicus,

who maximizes utility and is only motivated by pecuniary rewards. However, people often

strive for interesting activities or just want to stay active, that can especially be observed in

children (ibid. p.930). Some 31 million Germans actively work without pay for voluntary and

community services (Kranz, 2016). Hence, if the employment circumstances are satisfying, an

UBI can even led to an increase in labor supply (Petersen, 2011, p.930). Hohenleitner and

Straubhaar (2008, p.32) also state that if an UBI replaces other transfer payments, there is a

high possibility that money can be saved in the state budget.

3.3 Global basic income discussion and practice

There are some international as well as country specific networks that serve as a platform for

discussions and information exchange concerning UBI. One of the international networks is

BIEN which is based completely on volunteer work (BIEN, n.d.c). Founded in 1986, it informs

about the latest news, upcoming congresses and events. Another international UBI organization

is the Unconditional Basic Income Europe (UBIE) network and it is an affiliate of BIEN (BIEN,

n.d.c). UBIE was founded in 2014 following the European Citizens Initiative for Unconditional

6 “…unemployed persons with low earnings potential and/or receiving relatively generous unemployment benefits

face a situation where taking up employment may lead to little (or no) increase in disposable income as a result of

the combined effects of benefit withdrawal and higher tax burdens on in-work earnings” (Carone, Immervoll,

Paturot and Salomäki, 2004, p.8).

13

Basic Income (UBIE, 2016a). Since 2015, UBIE is an international non-profit organization

(ibid.). According to the second article of its charter, UBIE strives for an implementation of the

UBI as a human right (UBIE, 2016b). The Global Basic Income Foundation (GBI Foundation),

that was founded in 2000, expands the idea if a basic income worldwide (GBI Foundation, n.d.).

There are current examples of the introduction of an UBI. For example, in Brazil, the

implementation of an UBI is regulated by law and started in 2005 (Zimmermann, 2007). The

goal is to reduce hunger and provide dignified life. The implementation takes place in two steps.

Firstly, the poorest 20 percent of the population receive a Bolsa Familia (family grant) that is

meant to secure enough nourishment (ibid.). Nearly 46 million Brazilians receive the grant

which supports the reduction of inequality (Pasma, 2009). In a second step, the grant should be

transferred into an unconditional Citizen’s Basic Income that would ensure a subsistence

minimum and would be paid on a monthly or annually basis (Suplicy, 2004, p.1). Another

example is the US state Alaska. The idea of the Permanent Fund Dividend (PFD) is based on

the use of natural resources (Widerquist and Howard, 2012, pp.3-4). As the state receives

revenues from the oil export, it transfers a particular amount to the Alaska Permanent Fund

(APF). In 1982 it was decided to pay a dividend to everyone on an annual basis, so that the

citizens benefit from the Alaskan oil reserves. In the year 2008, the individual PFD amounted

to 3,269 dollars (ibid.) while on average it accounts for about 1,150 dollars (McFarland, 2016a).

Beside established basic income schemes, there have been some pilot projects, for example in

2008 in a Namibian village and in 2011 in India (GBI Foundation, 2012). The areas where the

projects were conducted have improved in terms of health, economic growth and education

(ibid.).

On the European continent, there are further examples of UBI discussions and projects. In 2016,

Swiss citizens voted on the introduction of an UBI within the scope of a national referendum.

Ultimately, 23 percent voted for an UBI in Switzerland that should amount to about 2,500 Swiss

francs7 for adults (Martin, 2016). As it was the first time a nation had a referendum regarding

the implementation of an UBI model, it initiated various debates about UBI in many European

countries (Basic Income Switzerland, 2016). In Finland, the parliament agreed to conduct an

experiment on basic income which started in January 2017 (McFarland, 2016b). The monthly

amount of 560 euro is received by 2,000 random current recipients of the unemployment

benefits. The main goal is to test after two years the change in employment, as the UBI group

7 2,500 Swiss francs correspond to nearly 2,348 euro (Fx Exchange Rate, 2017).

14

will be compared to a control group, consisting of unemployment benefit recipients without an

UBI (ibid.).

4. Case Germany: Precarity and UBI 4.1 Precarious labor market

Figure 2 is based on the data from the Statistisches Bundesamt (2016) and shows the overall

labor market situation in Germany in the time period from 1991 to 2015. Among the

dependently employed, the majority has regular contracts (ibid.). Nevertheless, according to the

global trend as described by Standing (2014), the number of those regularly employed

decreased, from 77.70 in 1991 to 65.82 percent in 2010 while the atypical form became more

frequent (Statistisches Bundesamt, 2016). From 1991 to 2010, atypical form of employment

increased from 12.79 to 22.61 percent. Among the atypical employment forms, part-time

employment was the most frequent contract form, while fixed-term employment and minor

employment had nearly the same level of 6 to 8 percent between 2005 and 2015:

Figure 2: German labor market (percentage of total employment)

Source: own representation (based on Statistisches Bundesamt, 2016)

In the beginning of the century, Germany tried to define itself as a social state in new terms and

to find a solution for the economic stagnation (Deutscher Bundestag, 2013). This is the reason

why in the year 2003, the government of Gerhard Schröder proposed the Agenda 2010

including reforms that concern the labor market and state benefits (ibid.). According to Vogel

(2009, p.205), the Agenda 2010 and the corresponding Hartz laws are responsible for the

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

19

91

19

95

20

00

20

05

20

10

20

15

20

10

20

15

self-employment solo self-employment dependent employment regular employment atypical employment fixed-term part-time minor (Mini-Job) temporary

15

degradation of the social system and solidarity in Germany. The implemented Hartz laws still

cause strong negative critique (Deutscher Bundestag, 2013). The protests concern the

Arbeitslosengeld II (Unemployment Benefit (UB) II) which replaced the former system of

transfer payment – Arbeitslosenhilfe (unemployment assistance) and Sozialhilfe (social

welfare). The main argument of the Agenda 2010 was the reduction of state payments by

providing jobseekers with any kind of employment. Consequently, the reform has led to the

creation of marginal employment, such as the Minijobs which imply a wage of approximately

450 euro, barely any labor-related security and no employee benefits (ibid.).

Hence, the labor reforms in Germany have been created to introduce an income support in the

form of the new UB II, that should enable people to accept job offers in the low-wage sector

and that should simultaneously reduce poverty (Berthold and Coban, 2014, pp.118-119).

However, the labor income of the Germans participating in the labor market has a direct

negative impact on the UB II (ibid. pp.119-120). Therefore, although the UB II should reduce

the amount of people living at risk of poverty, there is a trend towards increased poverty in

Germany (ibid. p.121). The payment does not seem to improve the situation of the recipients,

as they tend to prolong their status as unemployed and remain in the unemployment trap. Even

if they participate in the labor market, it is often in the form of a Mini-job, a marginal and

precarious employment form (ibid. p.122).

4.2 Precarity in Germany

In Germany, well educated people represent the majority of the working population (Crößmann

and Mischke, 2016, p.34). Moreover, regarding the young population of 25 to 29 years, more

women have a higher educational qualification than men (ibid.). Nevertheless, women in

Germany earn 22 percent less than men in 2014 (ibid. p.42). The gap is mainly explained by

the different career paths women and men have. Hence, more women are working as part-time

employees, have a marginal employment or have career breaks due to childcare (ibid.). Despite

these reasons for the gender pay gap, the government of the German chancellor Angela Merkel

introduced the Betreuungsgeld (child care subsidy) on a national basis in 2013

(Betreuungsgeld-Aktuell, 2017). The payment of initially 100 euro and afterwards 150 euro

was paid monthly to every parent raising children at home instead of choosing public daycare

center till the third year (ibid.). There were many arguments against the law of child care

subsidy. For example, it is not fair to people wanting to continue their career (Standing, 2014,

p.106) or the payment could be exploited by migrant families although their children would

need to attend a public daycare center in order to integrate in the German society

16

(Betreuungsgeld-Aktuell, 2017). Ultimately, the child care subsidy was declared

unconstitutional in 2015 on a national basis but the federal states Bavaria and Saxonia have

maintained the payment within their states (ibid.).

In Germany, family politics and structures foster atypical employment especially for women.

The combination of job and family is often regarded as a conflict, whereas many women

postpone family planning or decide not to have children at all (Eichhorst and Thode, 2010, p.6).

An important reason for this is not only the increasing labor participation of women but also

the fact that the income of one person working full-time is not enough to provide for the needs

of the family (ibid.). Therefore, the most common family working structure in Germany is a

parent working full-time and a parent having marginal employment (ibid. p.4). Nearly half of

the German female employees of 20 to 64 years is employed with a part-time contract,

compared to 9 percent of men (Crößmann and Mischke, 2016, p.48). Furthermore, as far as

public childcare is concerned, Germany has a low supply of daycare centers compared to other

European countries (Veil, 2003, p.12). Hence, although many women are not satisfied with the

role of a housewife, the family model of two parents working full-time often cannot be realized

(ibid. p.13). Furthermore, as Germany has a strong focus on family transfer payments, its

investing activities in public daycare centers do not improve the situation effectively (ibid.

p.21). Although the amount of children attending a daycare center increased due to the legal

claim for a place for a child older than two years, the care quality is often insufficient (Spieß,

2014, p.609). Moreover, particularly migrant children who need a good care quality for a faster

integration are in daycare centers with inadequate support (ibid.). Therefore, as migrant children

are not sufficiently cared of, the shortage and quality of German daycare centers contribute to

the widening of the precariat in Germany.

As it is also shown in Figure 2, the share of people with fixed-term contracts has been

approximately 8 percent during the last decade (Crößmann and Mischke, 2016, p.52). However,

nearly 40 percent of those fixed-term employed confirm that they would rather prefer a regular

contract. The duration of most fixed-term contracts is shorter than a year which makes it very

difficult for all the persons concerned to plan for the future (ibid.). Another feature of the

German precariat is the low employee participation in further professional training despite the

fact that work is becoming more complicated (ibid. p.38). In 2014, only 8 percent confirm that

they participate in trainings (ibid.). Moreover, the amount of elderly people of 60 to 64 years

still working doubled in the last decade which is another evidence for a growing German

precariat (ibid., p.68). This helps most elderly people to escape old-age poverty because of low

17

pensions (ibid). A further phenomenon is that more Germans have a second job, mostly as a

marginal activity (ibid. p.56). The number of people concerned has increased by more than 60

percent since 2005. Especially women often have multiple jobs to be able to provide for the

family and their own pension (ibid.). This makes the triple burden a quadruple burden

(Standing, 2014, p.205). There is also a large share of the German precariat that is academic

precariat (Sander, 2012). Especially many of those with a fixed-term contract have a high

educational achievement (Crößmann and Mischke, 2016, p.52). This is mainly due to fixed-

term projects in the science sector (ibid.). The last recession also contributed to the creation of

precarious jobs in Germany (Schmid and Protsch, 2009, pp.6-7). The employment rate among

men decreased and about half of the male population has atypical employment (ibid.).

Migrants are also a large part of the German precariat as Germany has a long migrant history.

Standing (2014, p.171) considers Turkish guest workers and their families as long-term

migrants in Germany. About 500,000 migrants cannot exercise a job according to their

education as their degrees are not recognized by the state (ibid. p.162). Regarding the current

developments, it can be stated that the asylum seekers in Germany also represent a potential

precariat, as they have to wait 5.2 months on average for an asylum decision (Deutscher

Bundestag, 2016). During this time, they often live in specific shelters without a possibility to

be integrated. This state of uncertainty that lasts about half a year can lead to skill depreciation

and a loss of dignity, forming characteristics of the future precariat. In 2016, 722,370 people

claimed asylum for the first time, compared to 21,029 a decade earlier in 2006 (Bundesamt für

Migration und Flüchtlinge, 2017, p.4). Additionally, one part of the precariat is represented by

the functional analphabets who form a group of approximately 7.5 million people in Germany

(Grotlüschen and Riekmann, 2011, p.2). Due to their inability to read or write coherent texts,

they cannot fully participate in the citizenship (ibid.).

Furthermore, there is a possible relation between the precariat and the German secondary school

system (Standing, 2014, pp.124-125). At the age of 10 years, pupils are allocated to three main

school types: Hauptschule, Realschule and Gymnasium. The Hauptschule, which represents the

lowest kind of secondary school and educates future apprentices, is currently an institution for

failing children. As the system is shifting, more pupils from the middle-grade Realschule and

the top Gymnasium start an apprenticeship, although these schools were initially supposed to

educate young people with white-collar professions or university graduates (ibid.).

Additionally, further professional education becomes less valuable in Germany. The German

apprenticeship is well-known in many countries and is often considered to be the reason for the

18

economic success (Glover, 1996, p.84; Rinne and Zimmermann, 2012, p.18). However, less

young people decide to do an apprenticeship (Standing, 2014, p.123; Bundesministerium für

Bildung und Forschung, 2015; Bundesagentur für Arbeit, 2016).

4.3 UBI debate in Germany

In Germany, the debate regarding a basic income emerged especially after the insight that the

current poverty and unemployment issues cannot be regulated with the help of the existing

control measures (Netzwerk Grundeinkommen, n.d.a). As opposed to the current UB II system,

a basic income is regarded as a possible solution for the problems on the German labor market

(ibid.). In 2016, a basic income party Bündnis Grundeinkommen (BGE) – Die

Grundeinkommenspartei was founded with the only goal of achieving a basic income in

Germany (Acker, 2016).

There are mainly five implementation models that are discussed in Germany: The Basic Income

Proposal by the social entrepreneur and founder of the German drugstore chain DM, Götz

Werner (Werner, 2007), the proposal of the Ideal-typical Basic Income of the Hamburgisches

WeltWirtschaftsinstitut (HWWI) (Hohenleitner and Straubhaar, 2008), the UBI proposed by

the party Die Linke (Die Linke, Bundesarbeitsgemeinschaft Grundeinkommen, 2006), the

Green Basic Security (Poreski and Emmler, 2006) and lastly, the Solidary Citizen’s Income

(Althaus, 2007)8. The table below roughly presents the aforementioned proposals:

8 The translations of Grundeinkommensvorschlag (Basic Income Proposal), Idealtypisches Grundeinkommen

(Ideal-typical Basic Income), Grüne Grundsicherung (Green Basic Security) and Solidarisches Bürgergeld

(Solidary Citizen’s Income) are taken from Gilroy et al. (2013).

19

Table 2: Proposed models of basic income in Germany

Proposal Author Amount for

adults

Amount for

children

Financing

Basic Income

proposal

Werner (2007) 600€ to max.

1,600€

300€ Goods: 50%

added value tax

Ideal-typical

Basic Income

HWWI, Hohenleitner/Straubhaar

(2008)

800€/600€

(200€

insurance

voucher

included)

Income:

61%/49%

income tax

Linke UBI BAG Grundeinkommen, Die Linke

(2006)

950€ 475€ Tax mix

Green Basic

Security

Poreski, Emmler (2006) 500€ 400€ Income: 25%

basic security

tax; 25%

income tax

Solidary

Citizen’s

Income

Althaus (2007) 800€/400€

(200€

insurance

premium

included)

500€

(200€

insurance

premium

included)

Income:

50%/25%

income tax

Source: Petersen, 2011, p.927

There are also basic income networks and platforms in Germany. The Netzwerk

Grundeinkommen (Basic Income Network) is a German BIEN affiliate (BIEN, n.d.c). It is a

forum for information, news and discussions concerning basic income. Founded in 2004, it

consists of individuals and organizations that promote the UBI idea in Germany (Netzwerk

Grundeinkommen, n.d.b). The UBI is further actively discussed and researched within the Attac

Germany AG Genug für alle (Enough for All) (Attac, n.d.), Freiheit statt Vollbeschäftigung

(Freedom instead of Full Employment) (Freiheit statt Vollbeschäftigung, 2017),

Gewerkschafterdialog – Grundeinkommen (Trade Unionist Dialog – Basic Income)

(Gewerkschafterdialog – Grundeinkommen, 2013), Grünes Netzwerk Grundeinkommen (Green

Network Basic Income) (Grünes Grundeinkommen, n.d.), Unternimm Die Zukunft (Undertake

the Future) (Unternimm-Die-Zukunft, n.d.) and Mein Grundeinkommen (My Basic Income)

(Mein Grundeinkommen, 2017).

5. Precarity and UBI in a macroeconomic analysis 5.1 Argumentation

With the help of the UBI, the members of the precariat can theoretically reject an employment

that is not appropriate in their particular opinion. This is particularly important for the German

precariat due to the Hartz laws. The labor reform of 2003-2005 incorporated sanctions for

people who denied a job offer, like payment shortenings of the UB II. Hence, even if sanctions

are applied, individuals in the precariat can continue their job search due to the fundamental

20

security provided by the UBI. Those in the precariat can freely decide upon their labor force

participation and hence, start to feel a certain power towards their employers. Such freedom of

choice will result in liberation from enforcements and consequently, in a happier working life.

As presented above, there are several reasons why the precariat is formed. The following

analysis is based on one cause for precariatization which is technological progress and the

resulting jobless growth (Petersen, 2014, p.861). The permanent development of technology

represents a threat for nearly 60 percent of current German workers (Brzeski and Burk, 2015,

p.1). Nevertheless, an improvement in technological processes is crucial for a nation from an

economic point of view (Petersen, 2014, p.861). Theoretically, technological progress induces

economic growth which implies an increased real GDP9 and employment, improved living

conditions and social life due to the rise in government’s spending (ibid.). However, for

simplicity reasons, if the only factor a firms uses as input is labor, an advancement in technology

means that labor is reduced (ibid. p.862). As a result, unemployment rises which is a negative

effect on the already existing precariat. Nevertheless, the amount of goods increases during the

technological innovation and hence, there is a rise in labor demand to handle the risen real GDP

(ibid.). The overall effect on employment is presented in the following Figure 3.

9 The real GDP represents the volume of all goods, including services that an economy creates in a particular year

(Petersen, 2014, p.861).

21

Figure 3: Technological progress and the level of employment

Source: adapted from Petersen, 2014, p.862

Figure 3 illustrates the interaction between labor saving technological progress (jobless growth)

and employment enhancing growth. Assuming for simplicity a simple production function

which produces X units of real GDP (Y) with only the input factor labor: 𝑋 = 𝑓(𝐿). The inverse

function is 𝐿 = 𝑓−1(𝑋). The conditional employment level during a phase of technological

progress depends on the degree of economic growth that is represented by the real GDP

(Petersen, 2014, p.862). If a country has an economic growth that corresponds with a real GDP

of 𝑌1 (a shift from the “old” curve to the “new” curve in the graph), the employment reducing

effect of the technological progress prevails and the unemployment rate rises. The necessary

employment threshold (ET) needed for full employment compensation is 𝑌𝐸𝑇 (reflecting the

original full employment level Q0) and the employment rate rises only if the real GDP exceeds

this level of economic growth. Consequently, every time the economy grows by less than the

needed employment threshold 𝑌𝐸𝑇, the situation is called jobless growth (ibid.). Technology

induces a reduction of labor employment and may not be complimentary to labor input as in

the historical past.

The concept of jobless growth is an important aspect in understanding the emergence of the

precariat in Germany. When the labor market equilibrium, as shown in Figure 3, decreases from

𝑄0 to 𝑄1, more people enter the precariat. Whether workers are dismissed directly because of

22

new technologies or fear job loss due to new automatization processes, they share the precarious

living situation. A jobless growth was first detected in the US in the 1990s as a contradictory

phenomenon to the Okun’s Law10 (Khemraj, Madrick and Semmler, 2006, p.3). In Germany,

the real GDP increased from 84.2 index points in 1991 to 111 index points in 2012 but the total

amount of labor hours decreased from 60,082 million in 1991 to 58,147 million in 2012

(Statistisches Bundesamt, 2013, p.321/344). It is important to observe the development of the

volume of work rather than the unemployment rate in order to state that there is a jobless growth

in Germany (Petersen, 2014, p.862). Thus, the decrease in unemployment and work hours as

well as the simultaneous increase in the number of people at risk of poverty are possible

indications for the growing German precariat (see further Brady and Biegert (2017).

Therefore, economic prosperity in a country can be increased without a rise in employment

(Petersen, 2014, p.863). According to economic laws, as the demand for a particular good

decreases, its price adjusts downwards. Hence, when firms decrease their labor demand due to

technological progress, employees adjust the price for work which is represented by their wage.

Unemployed individuals will offer their work for a lower wage in order to become employed.

The phenomenon can be observed in Germany where the low-wage sector and working poverty

are growing (ibid.). As Petersen (ibid. pp.863-864) states, there are two possibilities. The

employment rate can either be increased while workers receive lower wages or the wages can

be kept stable which leads to a higher unemployment rate. The author proposes governmental

transfer payments in case the wage does not assure a minimum living standard (ibid. p.864). In

the following hypothetic analysis this transfer payment is the UBI.

The idea is to observe how different degrees of precarity and the implementation of an UBI

affect economic growth and ultimately, the employment level. When the employment level in

Figure 3 increases as a result of a risen real GDP (𝑄2), it implies that the labor demand

increases. This is crucial for the precariat issue as the labor market situation changes and the

members of the precariat can benefit from the emerging bargaining power. Hence, they can

negotiate higher wages enabling higher consumption due to higher disposable income levels

and, most importantly, the seven labor-related securities presented in Table 1.

The following approach will be based on Figure 3 and on the assumption that only when the

10 “Okun’s Law pertains to the relationship between in U.S. economy’s unemployment rate and its gross national

product (GNP). It states that when unemployment falls by 1%, GNP rises by 3%. However, the law only holds

true for the U.S. economy and only applies when the unemployment rate falls between 3% and 7.5%”

(Investopedia, 2017).

23

real GDP, which represents economic growth, exceeds the employment threshold 𝑌𝐸𝑇, the labor

demand can rise. According to general economic conditions, the supply increases when demand

increases. Thus, the real GDP, which is the value of all goods and services produced, will

increase if the consumption goods and services demand increases. Consumers tend to rise their

consumption demand when there is an increase in disposable income. The following Figure 4

shows the line of argument:

Figure 4: Line of argument of the macroeconomic approach

Source: own representation

The analysis will not focus on the effect of UBI on labor supply, as it was done elsewhere

(Gilroy et al., 2013). Instead, it will examine the situation on the goods market and observe the

change in consumption goods demand through the following cases:

Table 3: Analysis cases

Consumption goods demand case Degree of precarity UBI payment

1. Secure individual without UBI P = 0% UBI = 0€

2. Strong precariat member without UBI P = 70% UBI = 0€

3. Strong precariat member with UBI P = 70% UBI = 600€

4. Medium precariat member with UBI P = 30% UBI = 600€

5. Light precariat member with UBI P = 10% UBI = 600€

6. Secure individual with UBI P = 0% UBI = 600€

Source: own representation

In this analysis, 𝑃 is a percentage that measures the seriousness of the precarious living

situation. As it can be seen in Table 3, the precariat class is divided in strong (𝑃 = 70%),

medium (𝑃 = 30%) and light (𝑃 = 10%)11. The first hypothesis (𝑯𝟏) of this analysis is that

consumption goods demand will rise from the first to the sixth case. There are three main

reasons for this assumption. First, the demand will increase due to the rise in disposable income

because of the UBI payment. Second, the reduction in the degree of precarity 𝑃 will improve

the material situation of the individual in the model which implies an additional income for

consumption. Third, when the UBI approach is introduced to the model in the third case, the

11 The fragmentation of the precariat class in strong, medium and light is applied by the authors of the paper for

simplicity reasons.

Increase in desposable

income

Increase in consumption

goods demand

Increase in real GDP

(economic growth)

Increase in employment level

Reduction of the

precariat

24

labor supply might even increase, as explored by Gilroy et al. (2013). The second hypothesis

(𝑯𝟐) concerns the effect of the UBI implementation. It is assumed that the additional income

provided by the basic security will decidedly increase the consumption goods demand in case

three as compared to case two. The third hypothesis (𝑯𝟑) is that in case six, the demand is

higher than in case one due to the additional income in the form of an UBI. All aforementioned

hypotheses support the line of argument in Figure 4 that with the increase in disposable income

which is represented by the proceeding from case one to six, the consumption goods demand

increases. Consequently, the GDP will rise leading to an economic growth which initiates an

increase in employment. Ultimately, the number of people in the precariat is reduced.

In order to incorporate the degree of precarity 𝑃 and the UBI into the budget constraint of the

individual, Gillman’s (2011, p.16) consumption goods demand equation (𝑐𝑑 = 𝑤𝑙𝑠 + Π) has to

be adjusted:

𝑐𝑑 = (1 − 𝑃)(𝑤𝑙𝑠 + 𝑆) + Π (5.1)

where 𝑐𝑑 is the individual’s consumption goods demand, 𝑤 is the real wage rate, 𝑙𝑠 is the

amount of time 𝑇 (𝑇 = 24 hours and 𝑇 = 𝑙𝑠 + 𝑥) that an individual spends working instead of

enjoying leisure 𝑥, and Π is the profit the firm generates from supplying consumption goods.

In this simplified model, the profit is completely transferred to the consumer (Gillman, 2011,

p.21).

As a precarious living situation has an impact on disposable income, it is introduced into the

equation by removing a specific share of the income (1 − 𝑃). Additionally, the disposable

income for consumption is expanded by a new variable 𝑆 that represents the social income. As

aforementioned, the precariat members have a lower social income than people in secure

circumstances. The precariat lacks support claims within their family and community and they

cannot claim additional benefits (Standing, 2014, pp.18-20). UBI is introduced to the budget

constraint with the variable 𝐺 for governmental transfer payment:

𝑐𝑑 = (1 − 𝑃)(𝑤𝑙𝑠 + 𝑆) + Π + 𝐺 (5.2)

The finance issue in this model is solved by an implicit tax and by specifying that 𝑤𝑙𝑠 is a real

middle net income of a single household. Other parameters such as the productivity

parameter 𝐴𝐺 where subscript 𝐺 represents the goods output sector, 𝛾 and 𝛼 specified as part

25

of utility and technology specifications as applied by Gillman (2011) and 𝑇 the allocation of

time constraint assumed here that time available for labor l and leisure x in general terms sums

up to the amount T, are adequately calibrated ( 𝐴𝐺 = 1, 𝛾 = 0.5, 𝛼 = 1, 𝑇 = 24) and

correspond with the specification of Gillman (ibid., p.78). The social income 𝑆 is approximately

set to a half of 𝑤 (𝑆 = 0.5𝑤) for simplicity reasons because it is a very individual value and it

is generally difficult to quantify personal data, such as private benefits or family support claims.

Regarding the UBI, it is adapted to the German case. As aforementioned, 𝑤𝑙𝑠 is the real middle

net income of a single household which was approximately 1,433 euro in 2014 (Wirtschafts-

und Sozialwissenschaftliches Institut (WSI), 2017). The analysis is based on the example of a

single household because this form of living is rising (Standing, 2014, p.111). As the real

middle net income has increased on average by 25 euro per year since 2011 (WSI, 2017), it

reached about 1,483 euro in 2016. Therefore, it is assumed that the real middle net income in

2016 accounted for approximately 1,500 euro. The amount of the UBI, which is fixed to 600

euro net payment, corresponds with other analyses (Hohenleitner and Straubhaar, 2008, p.33;

Gilroy et al., 2013, p.47). Hence, the UBI amounts to 40 percent of the real wage rate 𝑤 (𝐺 =

𝑈𝐵𝐼 = 0.4𝑤) if one considers a 40 hours per week employment whereby the UBI represents

additional income per work hour13.

It might be concluded from 𝐺 = 𝑈𝐵𝐼 = 0.4𝑤 that the higher the real wage rate 𝑤 the more UBI

the agent receives as a net payment. However, the six cases can be interpreted as a hypothetic

week of 40 hours, included Saturday, with a fix real wage rate during the day (𝑇 = 24). On

Monday (case 1) the person is secure and receives a fixed-term contract on Tuesday (case 2) as

a contract extension and has to change the workplace and position for a project in another

location of the multinational company. On Wednesday (case 3) the UBI is introduced in

Germany. On Thursday and Friday (case 4 and 5) the labor-related securities (Table 1) are

improved, for example, the person is promised a permanent position in one location. On

Saturday (case 6), the agent receives a regular contract. In all cases, it is theoretically assumed

that the real wage rate 𝑤 remains the same and that the influence on the consumption goods

demand 𝑐𝑑 results from other calibrations, such as the degree of precarity 𝑃 and the

implementation of the UBI 𝐺.

For simplicity, the model is formulated here as a closed decentralized economy with separate

consumer and firm maximization problems. The corresponding goods demand equations are

13 It is further assumed that the agent works 40 hours per week in a month with 30 days.

26

already formulated in (5.1) and (5.2). The firm, as producer and supplier of consumption goods,

has the following Cobb-Douglas production function that also corresponds with Gillman (2011,

p.79):

𝑐𝑠 = 𝑦 = 𝑓(𝑙𝑑) = (𝑙𝑑)0.5 (5.3)

5.2 Calibration

The first case is that of the secure individual without an UBI. Therefore, the calibration in this

case is 𝐴𝐺 = 1, 𝛾 = 0.5, 𝛼 = 1, 𝑇 = 24, 𝑃 = 0%, 𝑆 = 0.5𝑤 and 𝐺 = 𝑈𝐵𝐼 = 0. The

consumption goods demand is presented as:

𝑐𝑑 = (1 − 0)(𝑤𝑙𝑠 + 𝑆) + Π

and the consumer maximization problem is:

𝑢(𝑐𝑑, 𝑥) = ln(𝑐𝑑) + ln(𝑥)

max𝑙𝑠

𝑢 = ln(𝑤𝑙𝑠 + 𝑆 + Π) + ln(24 − 𝑙𝑠)

The firm maximization problem is:

max𝑙𝑑

Π = (𝑙𝑑)0.5 − 𝑤𝑙𝑑

For a better comparison, the second and third cases are calculated with the corresponding

changes in the calibration, whereas the maximization problem of the firm in all of the following

cases remains identical. The first three cases are displayed in the Figure 5 below:

27

Figure 5: Aggregate goods supply and demand (case 1, 2 and 3)

Source: own representation

The fourth case is the one of a medium precariat member who receives an UBI of 𝐺 = 0.4𝑤.

In this case, the degree of precarity is reduced to 30 percent (𝑃 = 0.30). In case five, the degree

of precarity 𝑃 is further diminished and accounts for 10 percent (𝑃 = 0.10), while the agent

still receives an UBI. Finally, the sixth case contains a consumption goods demand 𝑐𝑑 and a

maximization problem of a secure individual who receives an UBI. The following Figure 6

presents all six cases:

0

1

2

3

4

5

6

7

8

9

10

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0

Rel

ativ

e p

rice

of

go

od

s to

lab

or

(1

/w)

Units of Goods (c)

Goods supply

Secure individual without UBI

(case 1)

Strong precariat member without

UBI (case 2)

Strong precariat member with UBI

(case 3)

28

Figure 6: Aggregate goods supply and demand (all six cases)

Source: own representation

6. Results

Figure 5 displays the consumption goods demand 𝑐𝑑 of cases one, two and three together with

the consumption goods supply 𝑐𝑠. The upward curve represents the goods supply while the

goods demand is displayed by the downward curves. As it can be seen, the secure individual

has a higher consumption goods demand 𝑐𝑑 due to a higher income than the strong precariat

member. The latter experiences an extreme cut in the labor income as well as in the social

income. The agent in case one takes advantage of the full amount of labor and social income

and hence, has a consumption goods demand of about 2.86 units of goods, compared to only

1.57 units demanded by the strong precariat member (case 2). Therefore, the demand in a secure

situation is nearly twice as high than the demand in the strong precariat situation. Case three

shows the change in the consumption goods demand 𝑐𝑑 of a strong precariat member after the

implementation of an UBI (600 euro). The goods demand rises in case three due to the

additional income. However, the rise is barely pronounced with a shift from 1.57 units of goods

(case 2) to 1.61 units of goods (case 3). Therefore, hypothesis 𝑯𝟐, assuming that the

introduction of an UBI in case three will decidedly raise the consumption goods demand, cannot

be confirmed. However, this result shows another important aspect of the UBI. One of the main

critiques regarding the introduction of an UBI, is that it will allow people to keep a certain

standard of living while ceasing to participate in the labor market. As it can be seen in Figure

0

1

2

3

4

5

6

7

8

9

10

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0

Rel

ativ

e p

rice

of

go

od

s to

lab

or

(1

/w)

Units of Goods (c)

Goods supply

Secure individual without UBI

(case 1)

Strong precariat member without

UBI (case 2)

Strong precariat member with UBI

(case 3)

Medium precariat member with

UBI (case 4)

Light precariat member with UBI

(case 5)

Secure individual with UBI (case

6)

29

5, the demand in case three is only slightly higher than in case two, meaning that the agent still

cannot afford the same consumption demand as a secure individual without an UBI (case 1).

This is because an amount of 600 euro is not an income that most German citizens can rely on

without working but is rather only a fundamental security.

All cases are ultimately shown in Figure 6. It can be observed that the reduction in the degree

of precarity 𝑃 has an pronounced impact on the consumption goods demand 𝑐𝑑. As the agent

becomes a member of the medium precariat with 𝑃 = 0.30 (case 4) and simultaneously receives

an UBI, the goods demand increases to 2.42 units. As the reduction in 𝑃 proceeds, the

consumption goods demand rises. Thus, the agent who is a member of the light precariat with

𝑃 = 0.10 (case 5) can demand approximately 2.74 units. Lastly, when the degree of precarity

equals zero (case 6) and the agent still receives an UBI, the consumption goods demand 𝑐𝑑 is

higher than that of the secure individual without UBI (case 1). While in case one, the agent

demands about 2.86 units, he or she can demand 2.88 units in case six. Analogously to the

change in the goods demand of the strong precariat member (case 2 and 3), the result in case

six implies that a secure individual cannot consume a much higher amount of goods only

because an UBI is transferred. Therefore, a secure individual will probably not rely on the UBI

as the only source of income but will continue to participate in the labor market.

Thus, although hypothesis 𝑯𝟐 cannot be confirmed, hypotheses 𝑯𝟏, assuming that the demand

will increase with every case from one to six and 𝑯𝟑, that in case six, the goods demand will

be higher than in case one can be confirmed. This means that even if the UBI does not raise the

goods demand much, together with the effective reduction in the degree of precarity 𝑃, the

consumption goods demand 𝑐𝑑 does increase. Hence, as in the line of argument (Figure 4), as

the goods demand increases, the supply of goods and services, represented by the real GDP,

will increase. This will eventuate in an economic growth with which the level of employment

will rise. The precariat will benefit from the increase in labor demand, as it will be in a better

bargaining situation and can then negotiate contracts with further reduced degree of precarity

𝑃. Consequently, the precariat can be diminished.

Hence, there is a possibility to reduce the amount of people in the current German precariat.

However, the introduction of an UBI is not enough to effectively raise the real GDP. The

currently existing labor market system should be reformed, so that the degree of precarity is

reduced and contracts are negotiated in a way that labor-related insecurities are as minor as

possible. New regulations regarding dismissal protection are required in order to facilitate

30

greater security, which will lead to an increased stability, goods demand and economic growth.

While employers should increase labor-related security, for policy makers this implies that the

UBI should be viewed as a potential form of new social and labor security that can help dealing

with poverty and social exclusion issues. Therefore, the UBI is a possible solution for the

growing German precariat.

7. Conclusion

The paper shows that there is a class-in-the-making, called the precariat. It does not only have

negative aspects, as there are individuals who prefer having project-like employments or those

who view precarity as a temporary step in the career. However, it also shows that precarity

influences the perception of time and the structure of life. People from almost every social and

demographic group can be members of the precariat, whereby the commodification of

education and knowledge is an important reason for this development. The growing precariat

has serious social, health and economic consequences. Not directly linked to the precariat but

to global inequality and poverty issues, the UBI is discussed and already successfully

implemented in some locations.

Beside the global precariat, the analysis indicates that there are strong signs for a precariat in

Germany (Brady and Biegert (2017). The labor market situation confirms that there are many

Germans in atypical employment while often, flexible work is not pursued voluntarily. The

Agenda 2010 and the Hartz laws contributed to the creation of the precariat in Germany that

can be confirmed nearly in all demographic groups. Furthermore, low investments in early

education as well as a discriminatory secondary school system enhanced precarity in Germany.

In parallel to these developments, the idea of an UBI is discussed in Germany. After performing

the analysis by incorporating precarity and UBI in a macroeconomic model, the results suggest

that an UBI represents a possible way to reduce the precariat. People in the precariat can thus

have a fundamental security and the possibility to deny undesired employment. However, other

measures, like the reduction of labor-related insecurities, are crucial to effectively reduce

precarity.

As every research based on a model, this analysis has limitations. There are various possibilities

of introducing an UBI. In this analysis, only one method was applied, namely the proposal of

HWWI which includes a 600 euro monthly net payment. Nevertheless, this particular amount

of an UBI was repeatedly mentioned in the literature (Hohenleitner and Straubhaar, 2008, p.33;

Gilroy et al., 2013, p.47). The analysis did not include indirect effects on parameters in the

31

calibration. It is probable that due to the UBI and the reduction in the degree of precarity,

employees might be more satisfied with their job and increase productivity. Thus, the parameter

𝐴𝐺 (productivity parameter) could be adjusted. Otherwise, the calibration in this paper

corresponds with that of modern macroeconomic analyses (Gillman, 2011), so the parameters

are set according to similar models in this field of research. Future research can compare various

UBI approaches with different amounts of payment and regulations because the external

conditions of an UBI may play an important role on the effect in Germany. The calibration in

the model can further be adjusted. Beside the adjustment of 𝐴𝐺 , a calibration of a particular

financing model could be included in the analysis as it is an important critical aspect of the UBI

approach. Moreover, the issue of time squeezes and work-for-labor can be introduced into the

model by hypothetically reducing the amount of disposable time 𝑇. Finally, it would be

interesting to include into further research the results of the current UBI projects, such as that

in Finland, in order to update the model with new insights.

As Jeremy Rifkin (1995, p.297) wrote in his book “The End of Work” in 1995:

“In the debates over how best to divide up the benefits of productivity advances, every

country must ultimately grapple with an elementary question of economic justice.

[…]Since the advances in technology are going to mean fewer and fewer jobs in the

market economy, the only effective way to ensure those permanently displaced by

machinery the benefits of increased productivity is to provide some kind of government-

guarantees income.”

32

References

Acker, R., 2016. BGE-Partei im Eiltempo gegründet. [online] Available at:

<https://www.grundeinkommen.de/27/09/2016/bge-partei-im-eiltempo-gegruendet.html>

[Accessed February 26, 2017].

Althaus, D., 2007. Das solidarische Bürgergeld: Sicherheit und Freiheit ermöglichen

Marktwirtschaft. In: Borchard, M. ed. 2007. Das solidarische Bürgergeld – Analysen einer

Reformidee. [pdf] Stuttgart: Lucius & Lucius. Available at: <https://www.sw.eah-

jena.de/fbsw/profs/michael.opielka/downloads/doc/2007/Opielka_-_Strengmann-

Kuhn_Das_Solidarische_Buergergeld.Finanz-und_sozialpolitische_Analyse_in_Borchard-

KAS_Hrsg._Lucius_u_Lucius_2007.pdf> [Accessed February 4, 2017].

ARD Mediathek, 2016. Arbeit um jeden Preis. [online] Available at:

<http://www.ardmediathek.de/tv/Arbeit-um-jeden-Preis-Nepalesen-schuft/Arbeit-um-

jeden-Preis/SWR-Fernsehen/Video?bcastId=38652974&documentId=38652996>

[Accessed December 11, 2016].

Attac, n.d. Grundeinkommen. [online] Available at: <http://www.grundeinkommen-

attac.de/grundeinkommen/> [Accessed February 3, 2017].

Basic Income Earth Network (BIEN), n.d.a. About basic income. [online] Available at:

<http://basicincome.org/basic-income/> [Accessed January 5, 2017].

Basic Income Earth Network (BIEN), n.d.b. History of basic income. [online] Available at:

<http://basicincome.org/basic-income/history/> [Accessed November 18, 2016].

Basic Income Earth Network (BIEN), n.d.c. About BIEN. [online] Available at:

<http://basicincome.org/about-bien/> [Accessed November 9, 2016].

Basic Income Switzerland, 2016. Basic Income Switzerland. [online] Available at:

<http://www.basicincome2016.org/> [Accessed February 24, 2017].

Berthold, N. and Coban, M., 2014. Kombilöhne gegen Erwerbsarmut: Warum die USA

33

erfolgreicher sind als Deutschland. Wirtschaftsdienst, 94(2), pp.118-124.

Betreuungsgeld-Aktuell, 2017. Betreuungsgeld. [online] Available at:

<http://www.betreuungsgeld-aktuell.de/> [Accessed March 2, 2017].

Bourdieu, P., 2004. Gegenfeuer. Konstanz: UVK Verlagsgesellschaft mbH.

Brady, David and Biegert, Thomas (2017), The Rise of Precarious Employment in Germany,

SOEPpapers on Multidisciplinary Panel data Research Nr 936. DIW Berlin. 40 pages [pdf]

Available at: https://www.diw.de/sixcms/detail.php?id=diw_01.c.567696.de

Brzeski, C. and Burk, I., 2015. Die Roboter kommen: Folgen der Automatisierung für den

deutschen Arbeitsmarkt. [pdf] Available at: <https://www.ing-diba.de/pdf/ueber-

uns/presse/publikationen/ing-diba-economic-research-die-roboter-kommen.pdf> [Accessed

January 20, 2017].

Bundesagentur für Arbeit, 2016. Ausbildungsstellenmarkt - Zeitreihengrafik. [online] Available

at: <https://statistik.arbeitsagentur.de/Navigation/Statistik/Statistik-nach-

Themen/Ausbildungsstellenmarkt/Ausbildungsstellenmarkt-Nav.html> [Accessed March 9,

2017].

Bundesagentur für Arbeit, 2017. Arbeitslosigkeit im Zeitverlauf. [excel] Available at:

<https://statistik.arbeitsagentur.de/nn_31892/SiteGlobals/Forms/Rubrikensuche/Rubrikens

uche_Form.html?view=processForm&resourceId=210368&input_=&pageLocale=de&topi

cId=17722&year_month=aktuell&year_month.GROUP=1&search=Suchen> [Accessed

January 15, 2017].

Bundesamt für Migration und Flüchtlinge, 2017. Aktuelle Zahlen zu Asyl. [pdf] Nürnberg:

Bundesamt für Migration und Flüchtlinge. Available at:

<http://www.bamf.de/SharedDocs/Anlagen/DE/Downloads/Infothek/Statistik/Asyl/aktuell

e-zahlen-zu-asyl-februar-2017.pdf?__blob=publicationFile> [Accessed March 9, 2017].

Bundesministerium für Bildung und Forschung, 2015. Berufsbildungsbericht 2015. [online]

Available at: <https://www.bmbf.de/de/berufsbildungsbericht-1077.html> [Accessed

March 9, 2017].

34

Burda, M.C. (2016), The German Labor MarketMiracle, 2013-2015: An Assessment. SFB 649

Discussion Paper 2016-005. Humboldt-Universität zu Berlin. Available at:

http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2016-005.pdf [Accessed November

17, 2017].

Carone, G., Immervoll, H., Paturot, D. and Salomäki, A., 2004. Indicators of unemployment

and low-wage traps: marginal effective tax rates on employment incomes. OECD Social,

Employment and Migration Working Papers No.18. Paris: OECD Publishing.

Castel, R., 2009. Die Wiederkehr der sozialen Unsicherheit. In: Castel, R. and Dörre, K. eds.

2009. Prekarität, Abstieg, Ausgrenzung – die soziale Frage am Beginn des 21. Jahrhunderts.

Frankfurt am Main: Campus Verlag GmbH.

Crößmann, A. and Mischke, J., 2016. Arbeitsmarkt auf einen Blick – Deutschland und Europa.

[pdf] Wiesbaden: Statistisches Bundesamt. Available at:

<https://www.destatis.de/DE/Publikationen/Thematisch/Arbeitsmarkt/Erwerbstaetige/Broe

schuereArbeitsmarktBlick0010022169004.pdf?__blob=publicationFile> [Accessed

February 23, 2017].

Deutscher Bundestag, 2013. Gerhard Schröders Agenda gegen den Reformstau. [online]

Available at:

<http://www.bundestag.de/dokumente/textarchiv/2013/43257637_kw11_kalenderblatt_age

nda2010/211202> [Accessed December 3, 2016].

Deutscher Bundestag, 2016. Dauer von Asylverfahren. [online] Available at:

<https://www.bundestag.de/presse/hib/201603/-/415640> [Accessed March 9, 2017].

Die Linke – Bundesarbeitsgemeinschaft Grundeinkommen, 2006. Einleitung zum Konzept für

ein bedingungsloses Grundeinkommen. [pdf] Available at:

<http://www.rosalux.de/fileadmin/rls_uploads/pdfs/Themen/Sozialpolitik/BGE-

Konzept_0604.pdf> [Accessed January 24, 2017].

35

Dörre, K., 2009. Prekarität im Finanzmarkt-Kapitalismus. In: Castel, R. and Dörre, K. eds.

2009. Prekarität, Abstieg, Ausgrenzung – die soziale Frage am Beginn des 21. Jahrhunderts.

Frankfurt am Main: Campus Verlag GmbH.

Ehrenberg, R.G., 1994. Labor Markets and Integrating National Markets. Washington D.C.:

Brookings Institution.

Eichhorst, W. and Thode, E., 2010. Vereinbarkeit von Familie und Beruf 2010. Benchmarking

Deutschland: Steigende Erwerbsbeteiligung, aber schwierige Übergänge. [pdf]

Bertelsmann Stiftung. Available at: <http://www.bertelsmann-

stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/GP_Vereinbarkeit_von_

Familie_und_Beruf_2010.pdf> [Accessed January 20, 2017].

European Commission, n.d. Poverty and social exclusion. [online] Available at:

<http://ec.europa.eu/social/main.jsp?langId=en&catId=751> [Accessed January 17, 2017].

Eurostat, 2014. Glossary: At risk of poverty or social exclusion (AROPE). [online] Available

at: <http://ec.europa.eu/eurostat/statistics-

explained/index.php/Glossary:At_risk_of_poverty_or_social_exclusion_(AROPE)>

[Accessed January 19, 2017].

Freiheit statt Vollbeschäftigung, 2017. Wer wir sind. [online] Available at:

<http://www.freiheitstattvollbeschaeftigung.de/wir> [Accessed February 3, 2017].

Friedrich-Ebert-Stiftung, 2006. “Gesellschaft im Reformprozess” Die Friedrich-Ebert-Stiftung

untersucht Reformbereitschaft der Deutschen. [online] Available at:

<http://www.fes.de/aktuell/documents/061017_Gesellschaft_im_Reformprozess_komplett.

pdf > [Accessed August 7, 2017].

Fx Exchange Rate, 2017. Schweizer Franken (CHF) zu Euro (EUR). [online] Available at:

<http://chf.de.fxexchangerate.com/eur/2500-currency-rates.html> [Accessed February 24,

2017].

Gewerkschafterdialog - Grundeinkommen, 2013. Home. [online] Available at:

<http://www.gewerkschafterdialog-grundeinkommen.de/> [Accessed March 3, 2017].

36

Gillman, M., 2011. Advanced modern macroeconomics: analysis and application. Essex:

Pearson Education.

Gilroy, B.M., Heimann, A. and Schopf, M., 2013. Basic income and labour supply: The

German case. Basic Income Studies, 8(1), pp.43-70.

Global Basic Income Foundation (GBI Foundation), 2012. BI worldwide. [online] Available

at: <http://www.globalincome.org/English/BI-worldwide.html> [Accessed February 23,

2017].

Global Basic Income Foundation (GBI Foundation), n.d. GBI. [online] Available at:

<http://www.globalincome.org/English/Global-Basic-Income.html> [Accessed December

15, 2016].

Glover, R.W., 1996. The German apprenticeship system: lessons for Austin, Texas. The Annals

of the American Academy of Political and Social Science, 544(1), pp.83-94.

Goldman, A.H., 1980. Business Ethics: Profits, Utilities, and Moral Rights. Philosophy &

Public Affairs, 9(3), pp.260-286. [online] Available at: <

http://www.jstor.org/stable/pdf/2265117.pdf?refreqid=excelsior:e10ade7bad7bfbb22cd446

3239a7fb07> [Accessed August 8, 2017].

Grabka, M.M. and Frick, J.R., 2008. The Shrinking German Middle Class: Signs of Long-Term

Polarization in Disposable Income? Weekly Report, 4(4), pp.21-27.

Grotlüschen, A. und Riekmann, W., 2011. Leo. - Level-One Studie: Literalität von

Erwachsenen auf den unteren Kompetenzniveaus. [pdf] Hamburg: Universität Hamburg.

Available at: <http://blogs.epb.uni-hamburg.de/leo/files/2011/12/leo-

Presseheft_15_12_2011.pdf> [Accessed March 9, 2017].

Grünes Grundeinkommen, n.d. Das Netzwerk. [online] Available at: <http://gruenes-

grundeinkommen.de/das-grune-netzwerk-grundeinkommen/> [Accessed March 3, 2017].

37

Hauser, R., 2007. Alternativen einer Grundsicherung. In: Heinrich-Böll-Stiftung ed. 2007. Die

Zukunft sozialer Sicherheit (Band 2 der Reihe Wirtschaft und Soziales). [pdf] Heinrich-Böll-

Stiftung. Available at:

<https://www.boell.de/sites/default/files/Reihe_Wirtschaft_Soziales_Band2_Zukunft_sozi

aler_Sicherheit_2007(1).pdf> [Accessed February 4, 2017].

Hohenleitner, I. and Straubhaar, T., 2008. Bedingungsloses Grundeinkommen und

solidarisches Bürgergeld – mehr als sozialutopische Konzepte. In: Straubhaar, T. ed. 2008.

Bedingungsloses Grundeinkommen und solidarisches Bürgergeld – mehr als

sozialutopische Konzepte (Edition HWWI). Hamburg: Hamburg University Press.

Investopedia, 2017. Okun’s law. [online] Available at:

<http://www.investopedia.com/terms/o/okunslaw.asp> [Accessed March 9, 2017].

Khemraj, T., Madrick, J. and Semmler, W., 2006. Okun’s law and jobless growth. [pdf] New

York: Schwartz Center for Economic Policy Analysis, The New School. Available at:

<https://mpra.ub.uni-muenchen.de/54881/1/MPRA_paper_54881.pdf> [Accessed January

17, 2017].

Kranz, B., 2016. Ehrenamt: 31 Millionen Ehrenamtler engagieren sich in Deutschland. [online]

Available at: <https://www.morgenpost.de/wirtschaft/article207429323/31-Millionen-

Ehrenamtler-engagieren-sich-in-Deutschland.html> [Accessed August 8, 2017].

Macmillan Dictionary, 2011. BuzzWord – the precariat. [online] Available at:

<http://www.macmillandictionary.com/buzzword/entries/precariat.html> [Accessed

November 1, 2016].

Martin, J., 2016. Switzerland: Swiss vote “no” on basic income referendum. [online] Available

at: <http://basicincome.org/news/2016/06/switzerland-swiss-vote-no-on-basic-income-

referendum/> [Accessed February 24, 2017].

McFarland, K., 2016a. Alaska, US: Amount of 2016 Permanent Fund Dividend to be $1022.

[online] Available at: <http://basicincome.org/news/2016/09/alaska-us-amount-2016-

38

permanent-fund-dividend-1022/> [Accessed February 24, 2017].

McFarland, K., 2016b. Finland: Basic income experiment authorized by Parliament. [online]

Available at: <http://basicincome.org/news/2016/12/finland-basic-income-experiment-

authorized-parliament/> [Accessed February 24, 2017].

Mein Grundeinkommen, 2017. Fragen. [online] Available at: <https://www.mein-

grundeinkommen.de/projekt/fragen> [Accessed March 3, 2017].

More, T., 1963. Utopia. Harmondsworth: Penguin Classics.

Netzwerk Grundeinkommen, n.d.a. Das Grundeinkommen – Die Idee. [online] Available at:

<https://www.grundeinkommen.de/die-idee> [Accessed March 3, 2017].

Netzwerk Grundeinkommen, n.d.b. Das Netzwerk – Über uns. [online] Available at:

<https://www.grundeinkommen.de/ueber-uns> [Accessed March 3, 2017].

Paine, T., 1999. Agrarian justice. [pdf] Available at: <http://schalkenbach.org/library/henry-

george/grundskyld/pdf/p_agrarian-justice.pdf> [Accessed November 11, 2016].

Pasma, C., 2009. Basic income in Brazil. [online] Available at:

<https://cpj.ca/blog/chandra/basic-income-brazil> [Accessed February 23, 2017].

Petersen, T., 2011. Arbeitsangebot und Grundeinkommen. WISU Das Wirtschaftsstudium,

40(7), pp.926-930.

Petersen, T., 2014. Technologischer Fortschritt und “Jobless Growth”. WISU Das

Wirtschaftsstudium, 43(7), pp.861-864.

Poreski, T. and Emmler, M., 2006. Die Grüne Grundsicherung in Kürze „Version 1.2“

(ergänzt). [pdf] Available at: <http://www.grundsicherung.org/grusi_kurz.pdf> [Accessed

January 25, 2017].

Rifkin, J., 1995. The end of work: the decline of the global labor force and the dawn of the post-

market era. New York: G.P. Putnam’s Sons.

39

Rinne, U. and Zimmermann, K.F., 2012. Another economic miracle? The German labor market

and the Great Recession. IZA Journal of Labor Policy, 1(3), pp.1-21.

Sander, N., 2012. Das akademische Prekariat: Leben zwischen Frist und Plan. Konstanz: UVK

Verlagsgesellschaft.

Schmid, G. and Protsch, P., 2009. Wandel der Erwerbsformen in Deutschland und Europa.

WZB Discussion Paper SP I 2009-505.

Schramm, M., 2008. Subsidiäre Befähigungsgerechtigkeit durch das solidarische Bürgergeld.

In: Straubhaar, T. ed. 2008. Bedingungsloses Grundeinkommen und solidarisches

Bürgergeld – mehr als sozialutopische Konzepte (Edition HWWI). Hamburg: Hamburg

University Press.

Spieß, C.K., 2014. Kita-Ausbau: Quo Vadis? Wirtschaftsdienst, 94(9), pp.609-610.

Standing, G., 2014. The precariat. The new dangerous class. London: Bloomsbury Academic.

Statistisches Bundesamt, n.d. Statistisches Jahrbuch für die Bundesrepublik Deutschland.

Stuttgart: Metzler-Poeschel.

Statistisches Bundesamt, 2011. Wirtschaftsrechnungen 2008. Leben in Europa (EU-SILC).

[pdf] Wiesbaden: Statistisches Bundesamt. Available at:

<https://www.destatis.de/GPStatistik/servlets/MCRFileNodeServlet/DEHeft_derivate_000

08918/2150300087004.pdf> [Accessed January 15, 2017].

Statistisches Bundesamt, 2013. Statistisches Jahrbuch: Deutschland und Internationales. [pdf]

Wiesbaden: Statistisches Bundesamt. Available at:

<https://www.destatis.de/DE/Publikationen/StatistischesJahrbuch/StatistischesJahrbuch201

3.pdf?__blob=publicationFile> [Accessed January 15, 2017].

40

Statistisches Bundesamt, 2016. Atypische Beschäftigung. [online] Available at:

<https://www.destatis.de/DE/ZahlenFakten/GesamtwirtschaftUmwelt/Arbeitsmarkt/Erwer

bstaetigkeit/TabellenArbeitskraefteerhebung/AtypKernerwerbErwerbsformZR.html>

[Accessed November 29, 2016].

Statistisches Bundesamt, 2017. Wirtschaftsrechnungen 2015. Leben in Europa (EU-SILC).

[pdf] Statistisches Bundesamt (Destatis). Available at:

<https://www.destatis.de/DE/Publikationen/Thematisch/EinkommenKonsumLebensbeding

ungen/LebeninEuropa/EinkommenLebensbedingungen2150300157004.pdf?__blob=public

ationFile> [Accessed January 15, 2017].

Suplicy, E.M., 2004. The prospects of basic income in developing countries. The approval and

sanctioning of the basic income bill in Brazil: how it will be implemented. In: Basic Income

Earth Network (BIEN), X International Conference on the Basic Income European Network

BIEN, now becoming the Basic Income Earth Network BIEN. Barcelona, September 19-20,

2004.

Unconditional Basic Income Europe (UBIE), 2016a. History of UBIE. [online] Available at:

<http://basicincome-europe.org/ubie/history-of-ubie/> [Accessed December 15, 2016].

Unconditional Basic Income Europe (UBIE), 2016b. Charter of UBIE. [online] Available at:

<http://basicincome-europe.org/ubie/charter-ubie/> [Accessed December 15, 2016].

Unternimm-Die-Zukunft, n.d. Home. [online] Available at: <http://www.unternimm-die-

zukunft.de/de/> [Accessed March 3, 2017].

Van Donselaar, G., 2009. The right to exploit: parasitism, scarcity, and basic income. New

York: Oxford University Press.

Van Parijs, P., 2004. Basic income: a simple and powerful idea for the twenty-first century.

Politics & Society, 32(1), pp.7-39.

41

Veil, M., 2003. Kinderbetreuungskulturen in Europa: Schweden, Frankreich, Deutschland. In:

Bundeszentrale für politische Bildung. ed. 2003. Erwerbstätigkeit von Frauen und

Kinderbetreuungskultur in Europa. Aus Politik und Zeitgeschichte (APuZ) 44. [pdf] Bonn:

Bundeszentrale für politische Bildung. Available at:

<http://www.bpb.de/apuz/27312/erwerbstaetigkeit-von-frauen-und-

kinderbetreuungskultur-in-europa> [Accessed March 2, 2017].

Vogel, B., 2009. Das Prekariat: eine neue soziale Lage? In: Castel, R. and Dörre, K. eds. 2009.

Prekarität, Abstieg, Ausgrenzung – die soziale Frage am Beginn des 21. Jahrhunderts.

Frankfurt am Main: Campus Verlag GmbH.

Werner, G.W., 2007. Ein Grund für die Zukunft: das Grundeinkommen. Verlag Freies

Geistesleben.

Widerquist, K. and Howard, M.W., 2012. Introduction: Success in Alaska. In: Widerquist, K.

and Howard, M.W. eds. 2012. Alaska’s Permanent Fund Dividend: examining its suitability

as a model. New York: Palgrave Macmillan.

Wiesenthal, H., 2007. Glanz und Elend eines radikalen Konzepts. Oder: warum das

Grundeinkommen nicht in unsere Zeit passt. In: Heinrich-Böll-Stiftung ed. 2007. Die

Zukunft sozialer Sicherheit (Band 2 der Reihe Wirtschaft und Soziales). [pdf] Heinrich-Böll-

Stiftung. Available at:

<https://www.boell.de/sites/default/files/Reihe_Wirtschaft_Soziales_Band2_Zukunft_sozi

aler_Sicherheit_2007(1).pdf> [Accessed February 4, 2017].

Wirtschafts- und Sozialwissenschaftliches Institut (WSI), 2017. Reale mittlere

Nettomonatseinkommen (in Euro) privater Haushalte in Deutschland, 2005-2015. [online]

Available at: <https://www.boeckler.de/wsi_50679.htm> [Accessed January 27, 2017].

Zimmermann, C., 2007. Brasilien – nationale Einführung eines Grundeinkommens als Weg aus

Armut und sozialer Unsicherheit? [online] Available at:

<https://www.rosalux.de/documentation/12937/brasilien-nationale-einfuehrung-eines-

grundeinkommens-als-weg-aus-armut-und-sozialer-unsicherheit.html> [Accessed February

23, 2017].

Recent discussion papers 2017-11 Bernard Michael Gilroy

Julia Günthner The German Precariat and the Role of Fundamental Security - Is the Unconditional Basic Income a Possible Solution for the Growing Precarity in Germany?

2017-10 Achim Voß

Mark Schopf Lobbying over Exhaustible-Resource Extraction

2017-09 Walter Trockel

Claus-Jochen Haake Thoughts on Social Design

2017-08 Behnud Mir Djawadi

René Fahr Claus-Jochen Haake Sonja Recker

Maintaining vs. Milking Good Reputation when Customer Feedback is Inaccurate

2017-07 Bernard M. Gilroy

Nico Stöckmann The varying relevance of impact factors in gravity models: An explanation of the delayed development towards global trade

2017-06 Xuehai Zhang

Yuanhua Feng Christian Peitz

A general class of SemiGARCH models based on the Box-Cox transformation

2017-05 Juliane Proelss

Denis Schweizer Volker Seiler

Do Announcements of WTO Dispute Resolution Cases Matter? Evidence from the Rare Earth Elements Market

2017-04 Yuanhua Feng

Thomas Gries Data-driven local polynomial for the trend and its derivatives in economic time series

2017-03 Sonja Brangewitz

Behnud Mir Djawadi Angelika Endres Britta Hoyer

Network Formation and Disruption - An Experiment Are efficient networks too complex?

2017-02 Volker Seiler

Evgenia Taach Efectiveness of Official Development Assistance – Further Evidence from DAC Countries

2017-01 Nico Stöckmann “The Impact of Refugees on Per Capita Income” A Gravity

Model Approach 2016-06 Jochen Manegold Stackelberg Competition among Intermediaries in a

Differentiated Duopoly with Product Innovation 2016-05 Republished as CIE Working Paper 2017-05 2016-04 Marlon Fritz

Thomas Gries Yuanhua Feng

Growth Trends and Systematic Patterns of Booms and Busts – Testing 200 Years of Business Cycle Dynamics-

2016-03 Thomas Gries

Claus-Jochen Haake An Economic Theory of ‘Destabilization War’

2016-02 Daniel Kaimann

Nadja Maraun Joe Cox

Identifying preferences and heterogeneity of consumers in multiplayer video games

2016-01 Republished as CIE Working Paper 2016-05 2015-05

Sonja Brangewitz Claus-Jochen Haake Philipp Möhlmeier

Strategic Formation of Customer Relationship Networks

2015-04

Sonja Brangewitz Jochen Manegold

Competition and Product Innovation of Intermediaries on a Differentiated Duopoly

2015-03

Republished as CIE Working Paper 2017-10